3.4.4 business ethics

Question 1

define ethics

Answer 1

moral principles that govern the behaviour of a business

Question 2

define morals

Answer 2

standards of behaviour, principles of right and wrong

Question 3

define trade off

Answer 3

arises where having more of one thing potentially results in having less of another

Question 4

ethical decisions

Answer 4

businesses want to appear to be doing the right thing but this is not always possible if they wish to make a profit.
often there is a trade-off between ethics and profitability.
ethical trading is expensive and will have an impact on costs and profitability

Question 5

shareholders interests

Answer 5

interested in the profit performance of the business and any potential dividend payout from it.
less concerned with costly ethical issues and may even discourage ethical initiatives on financial grounds

Question 6

stakeholders interests

Answer 6

interested in the way that suppliers of materials and components to the business are treated.
pressure groups are interested in the use of child labour and sweatshops in the production process

Question 7

define corporate social responsibility

Answer 7

a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders

Question 8

csr impact

Answer 8

a business considers the impact the its decisions have on us as citizens.
business considers what responsibilities they have towards society as stakeholders.

Question 9

advantages of a csr approach

Answer 9

happy customers = more loyal to a csr business.
happy staff = more motivated and productive workers who are proud of the business they work for.
happy investors = more funding and investment will become available, many investors seek businesses with positive csr credentials.
new products new markets.
good pr.
happy community.
happy suppliers.
cost reductions

Question 10

disadvantages of a csr approach

Answer 10

motive = some businesses may have a csr policy specifically for the good pr that it creates.
cost = costs larger that then benefits.